Week In Review: How Trump's Policies Moved Stocks - May 18, 2019

China trade fight heats up while U.S. makes deal with Canada, Mexico on metals

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump and his administration with this weekly recap compiled by The Fly:

1. U.S.-CHINA TARIFFS: The Trump administration announced the U.S. will be ratcheting up import tariffs to 25% from 10% on about $200B worth of Chinese goods. As retaliation, China has plans to set new tariffs of between 5% and 25% on $60B of U.S. imports, which will impact around 5,000 products, starting on June 1, according to media reports on Monday. Commenting on the U.S. tariff increase on Chinese imports, KeyBanc analyst Philip Gibbs said he sees this as a modest negative for steel producers as key consumables remain sticky, and a relative neutral for ArcelorMittal (MT) given its global exposure. On steelmaking raw materials, the analyst sees this as a neutral for Cleveland-Cliffs (CLF) and a negative for Schnitzer Steel (SCHN). Clearer winners appear to be Global Brass and Copper (BRSS), Luxfer (LXFR), and Materion (MTRN), whereby it will be tougher for the Chinese to compete within the U.S. in its core businesses, Gibbs said.

2. DEAL ON STEEL: The Trump administration has reached a deal with Canada and Mexico to lift steel and aluminum tariffs, Washington Post reported on Friday. The deal, which avoids quotas on steel from the two countries, which Canada and Mexico had opposed, is a "significant step" toward congressional approval of the United States-Mexico-Canada Agreement, according to the Post.

3. PAUSE TO AUTO TARIFFS: Ahead of a May 18 deadline to decide whether to slap duties on car and auto part imports, President Trump issued a proclamation directing the United States Trade Representative to "negotiate agreements to address the national security threat" presented by imports of automobiles and certain automobile parts, noting that if agreements are not reached within 180 days that Trump will determine whether and what further action needs to be taken. In response, Cecilia Malmstrom, the EU Commissioner in charge of trade, said that while the EU "completely rejects" the notion that its car exports are a national security threat, the EU is prepared to negotiate a limited trade agreement including cars, "but not WTO-illegal managed trade." Publicly traded automakers include Daimler AG (DDAIF), Fiat Chrysler (FCAU), Ford (F), General Motors (GM), Honda (HMC), Nissan (NSANY), Toyota (TM) and Volkswagen (VWAGY).

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